French Finance Minister Christine Lagarde has cleared Vivendi mobile arm SFR’s planned e4.4 billion ($6.96 billion) takeover of telco Neuf Cegetel.
In accordance with a December agreement that was pending government approval, SFR has acquired all of the 28.45% stake in Neuf Cegetel held by the French commodity trader Louis Dreyfus Group at $54.82 a share.
SFR now has control of the telco, with 68.13% of its capital, and will make a public offer for remaining shares at $58 a share.
The takeover joins France’s second biggest mobile operator with its No. 2 broadband provider and comes as Gallic firms invest heavily in rolling out next-generation fiber optic networks.
A Vivendi statement said that the minister’s approval comes “in view of new commitments” made by the firm and its subsidiaries.
These commitments “address competitor access and new market entrants to wholesale markets on SFR’s fixed and mobile networks.”
SFR has also agreed to accept an independent TV distributor on its fixed network, if such a player appears, “as well as the availability on a nonexclusive basis on ADSL of eight new channels.”
A Finance Ministry statement said the deal “creates a new operator capable… of making the investments necessary” for “the deployment of a new fiber optic network and technical convergence toward multiservice offers.”
Vivendi, which holds a 56% stake in SFR, will now be a step closer to forming an integrated telco large enough to challenge France Telecom.
The combined company will have 19 million mobile customers and 3.6 million broadband customers, with revenues totaling $19 billion.